AMALGAMATED DAIRIES.

New Zealand Herald, Volume LXV, Issue 19960, 31 May 1928, Page 14

AMALGAMATED DAIRIES.

Sir, —The present dispute between Mr. Grounds and Mr. Goodfellow raises an imnortant issue to me as a shareholding supplier of the New Zealand Co-operative Dairy ,ompany, Limited. The real point appears to be whether the new marketing association, formed by Mr. Goodfellow, is a national movement, seeking to achieve the objectives which the Dairy Produce Board has failed to achieve. Mr. Grounds maintains that, because of its constitution and articles, Amalgamated Dairies cannot justifiably make this claim, and as a shareholder in the New Zealand Dairy Company I agree with him for the following reasons:—ln the first place, not one in a hundred shareholders of our company knows anything whatever about the constitution of Amalgamated Dairies, although we hold one half of the share capital, our contribution being £20.000. Mr. Goodfellow and Mr. J. B. Wright hold the other h.ilf, but the scheme has never been submitted to the shareholders, although the whole of our consignment produce, amounting to several million pounds sterling annually, passes through the hands of Amalgamated Dairies, which has four directors on its board—namely, Messrs. Goodfellow, Wright, the chairman of the New Zealand Dairy Company, and also its chief executive officer. The particular feature of this scheme to which I, ar. a shareholder, take the strongest possible exception is the manner in which clause 79 (a) of Table A of the Companies Act has been altered in the Articles of Association of Amalgamated Dairies. This clause in Table A reads: "The office of a director shall be vacated if be is concerned in, or participates, in, the Profits of any work for the company." hat reasonable provision has been struck out in the articles of Amalgamated Dairies, and the following clause has been substituted: "A director shall not be disqualified from his office by entering into contracts, arrangements, or deal- j ings with the company either as vendor, ' purchaser or otherwise, or by reason of his accepting, or holding an office paid or unpaid under the company, nor shall any contract, arrangement or dealing with the company be avoided by reason of the fact that any director is intei-ested therein, nor shall a director be liable to account to the company for any profit arising out of any contract, arrangement or dealing with the company, by reason of such director being a party to, or interested in, or deriving, profit from any such contract, arrangement, or dealing, and being at the same time a director of the company and in a fiduciary relation thereto." Mr. Gvounds is justified in his criticism that Amalgamated Dairies, because of its constitution, cannot be regarded as a national movement, and as a shareholder and supplier of the New Zealand Co-operative Dairy Company, I enter a strong protest against extraordinary powers of the above nature being vested in ' the directors of Amalgamated Dairies, without the knowledge or sanction of the company's shareholders. Edward C. Frost. Tuakau, May 29.